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Sunday, July 30, 2006

COLUMN: CHINA-LATIN AMERICA TRADE IS BEGINNING TO FAVOR CHINA

When I visited China last year, I came back with the impression that the Chinese will soon switch from exporting T-shirts and toys to more sophisticated products, such as cars and trucks. Well, it's already happening in Latin America, and it will have a big -- not necessarily good -- impact on the region. Last week, the Dow Jones wire reported that two Chinese car makers have begun selling vehicles in Venezuela. And the news coincided with new trade figures showing that the China-Latin America trade balance is beginning to change in China's favor. You can read the full column here.

15 Comments:

I don't see how importing "sophisticated" Chinese products is a threat to the region. This trend should actually have a positive impact in a market already flooded with European, American and, for that matter, Asian "sophisticated" products.

More options are good for consumers.

If Latin America was competitive in the "sophisticated sector" (I am assuming we are talking about automotive and high tech products), then Chinese exports would have some impact. The region is simply not competitive in these sectors.

As for the trade gap, we are again talking about a fundamental problem that goes beyond trade with China. The problem is that the regional economies are not competitive.

Good for the Chinese. They are fine people and tremendously hard workers. They have a sharp sense of right vs wrong. That's why they will succeed. I would have loved for my kids to be sent to a publicly funded Mandarin Chinese immersion school, but none exist. Politicians are lusting after the Hispanick vote, so they make sure only Spanish language schools are offered, in exchange for the Hispanic vote. I hear everyday, Hispanicks telling Americans that the key to success in the world is learning Spanish, that the world uses Spanish as its common language, that Spanish is the language of innovation and invention, the language of the richest countries in the world, that if you adopt Spanish as your language unlimited riches will then flow your way.....All that as people of Spanish speaking countries pay their life savings to get the hell out of their countries.

The Chinese are simply displacing the traditional commercial ties of Latin American countries. The Chinese are doing the same thing that the Taiwanese have done: the cheap products become sophisticated products sold at competitive prices and the European and American companies will be supplanted by well-made Chinese products. Mr. Thorsen forgets that many Chinese keep coming to this country no matter how rosy things seem to look in China at this time. Perhaps he can gather some support among folks with similar interest as his and petition the schools to teach Mandarin.

There is no doubt that Chinese competition in the US and EU markets does pose a major challenge for some countries, especially Mexico, which exports the same products as China to the US (auto parts and electronics). Still, they should be thinking more about how they can adapt to this situation and cooperate with China, rather than fending off Chinese competition, which is a near impossibility. There are also many ways in which Latin American countries stand to benefit from China’s growth (particularly those that export commodities), as is discussed in a excellent related post on ODI's Latin America and the Caribbean Blog (see http://lac.civiblog.org).

There is no doubt that Chinese competition in the US and EU markets does pose a major challenge for some countries, especially Mexico, which exports the same products as China to the US (auto parts and electronics). Still, they should be thinking more about how they can adapt to this situation and cooperate with China, rather than fending off Chinese competition, which is a near impossibility. There are also many ways in which Latin American countries stand to benefit from China’s growth (particularly those that export commodities), as this related post on ODI's Latin America blog points out (see http://lac.civiblog.org).

There is no doubt that Chinese competition in the US and EU markets does pose a major challenge for some countries, especially Mexico, which exports the same products as China to the US (auto parts and electronics). Still, they should be thinking more about how they can adapt and cooperate with China, rather than fending off Chinese competition, which is a near impossibility. There are also many ways in which Latin American countries stand to benefit from China’s growth, as I discussed in a recent post on ODI's Latin America and Caribbean blog at http://lac.civiblog.org

There is no doubt that Chinese competition in the US and EU markets does pose a major challenge for some countries, especially Mexico, which exports the same products as China to the US (auto parts and electronics). Still, they should be thinking more about how they can adapt to this situation and cooperate with China, rather than fending off Chinese competition, which is a near impossibility. There are also many ways in which Latin American countries stand to benefit from China’s growth (particularly those that export commodities), as is discussed in a excellent related post on ODI's Latin America and the Caribbean Blog (see http://lac.civiblog.org).

There is no doubt that Chinese competition in the US and EU markets does pose a major challenge for some countries, especially Mexico, which exports the same products as China to the US (auto parts and electronics). Still, they should be thinking more about how they can adapt to this situation and cooperate with China, rather than fending off Chinese competition, which is a near impossibility. There are also many ways in which Latin American countries stand to benefit from China’s growth (particularly those that export commodities), as is discussed in a excellent related post on ODI's Latin America and the Caribbean Blog (see http://lac.civiblog.org).

Because China knows how to negociate the trade agreements so that it favors her, it's not to blame. Still, it has to respect the free trade principles, free trade that actually brought the Chinese market place to what it is today.

Actually, Sourcing from China is vital to the economy of China, but also to the economies of other countries whose biggest businesses recognize the benefits of importing goods and services directly from Chinese manufacturers and suppliers. Those businesses who source from China can offer as much as 60% savings over goods and services produced in Europe and America, and up to 20% savings over third-world suppliers.

About this blog

Miami Herald and El Nuevo Herald columnist Andres Oppenheimer, author of five best-sellers on Latin American affairs and whose syndicated column appears in 55 major U.S. and Latin American newspapers, comments on the latest events in Latin America and U.S.- Latin American affairs. He is a member of The Miami Herald team that won the 1987 Pulitzer Prize. He also won the 1999 Maria Moors Cabot Award, the 2001 King of Spain prize, and the 2005 Emmy Suncoast award. He is the author of Castro's Final Hour; Bordering on Chaos, on Mexico's crisis; Cronicas de heroes y bandidos and Ojos vendados, and most recently of "Cuentos Chinos" (Plaza & Janes, Mexico.) A new Oppenheimer Report appears every Sunday and Thursday.